Cedric Company recently traded in an older model computer for a new model. The old model’s...

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Cedric Company recently traded in an older model computer for a new model. The old model’s...

Cedric Company recently traded in an older model computer for a new model. The old model’s book value was $261,000 (original cost of $571,000 less $310,000 in accumulated depreciation) and its fair value was $290,000. Cedric paid $69,000 to complete the exchange which has commercial substance.

Required:

Prepare the journal entry to record the exchange.

business accounting

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Answer 1

Answer #1

Date	account and explanation	debit	credit
	New computer (290000+69000)	359000
	Accumulated depreciation-Old computer	310000
	Gain on exchange		29000
	Old computer		571000
	Cash		69000
	(To record exchange)

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Answer 2

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